Brexit may have economic disadvantages for Great Britain, said Didier Kussu

Didier Kussu explained why he believes that staying in the EU can only be beneficial for the UK

( PR4US.com | Press Release | 2016-06-22 07:51:24 )I understand that the Brits were very frustrated with the unilateral decision of the European Central Bank to require that clearing houses handling euro-denominated transactions be located in the Euro zone, for the sake of having total control and supervision over the system’s stability, as well as this crucial part of the European financial system.

For many Brexiters, sovereignty seems to be the most important factor for the Brexit, which I understand. They may argue that EU membership involves giving up some control over UK’s own affairs. It is also true that EU institutions have drained power from the British Parliament. But this is always the case when you are a part of a community that endeavours to work for the benefit of all.

Immigration is another factor that Brexiters are mostly worrying about since under the EU law, Great Britain does not have the right to prevent anyone from another member state coming to live in the UK, and UK citizens benefit from an equivalent right to live and work anywhere else within the European Union. However, this has resulted in a massive increase in immigration into the United Kingdom, notably from eastern and southern Europe.

According to Professor Adrian Favell from London School of Economics, limiting freedom of movement would deter the "brightest and the best" of the continent from coming to Britain and reduce the pool of candidates employers can choose from. Free movement of people across the EU also opens up job opportunities for British workers seeking to work elsewhere in Europe.

And I should also add that, what has made the United States a powerful country in the twentieth century until now, is “immigration”. Nonetheless, allowing criminals in the country can only make the situation worse. But these are very complex issues to deal with, since there is no central database for criminal records and institutions such as ECRIS (European Criminal Records Information System), Interpol and others were not conceived to handle competently such matters.

Unskilled labor and/or unqualified workers “maybe” needed in a variety of fields and are “potentially” part of the country’s economic prosperity. Beside, I believe that everyone should be giving a chance, whether “skilled or unskilled workers” but criminals should not be allowed anywhere.

London is the financial capital and centre of the world:
Foreign exchange market is the most most liquid market to-day, interest rate derivatives, insurance and bond markets are the core elements of the GFS (Global Financial System). These dwarf the equity markets by orders of magnitude. London really dominates all of these markets by significance volume of transactions. In short, more money flows through London, daily, than all the exchanges in the United States and Canada combined.

Now, according to ECB, the average annual value of London-based transactions is EUR 130,000 billion. Relocation would certainly lead in increasing financial activity in the Euro zone, which will create capital inflows from the UK.
The United Kingdom has five times as many foreign banks as there are in France, and four times as many as in Germany, with the domestic financial sector accounting for only twice as much of GDP percentage-wise.

In the event that 80% of European banks and 50% of non-UK and non-European banks were to move to the euro area to develop their activities there, potentially some GBP 680 billion (EUR 860 billion) could flow into the euro area. This is the equivalent of 34% of British GDP, and more than 8% of euro-zone GDP.
The pound plummets:
In such a scenario, the pound sterling could depreciate by 34% against the euro. The euro's real effective exchange rate, measured against a basket of currencies, would rise by 10-12%. The negative effect on European exports could be limited by new, unconventional actions from the ECB, such as lowering the interest rate on deposits. According to our calculations, the euro area's GDP would grow by 1.3% over two years.
If the United Kingdom votes to stay in the EU, the euro area could require that clearing houses be relocated as early as April 2017. Until then, the United Kingdom's European future will remain uncertain – dampening investment, dragging down the value of the pound, and possibly limiting both its rise against the euro to 4% and the appreciation of its real effective exchange rate to 8% over the long term, according to Edmond de Rothschild Group.

As for now, the European Union has substantial leverage over the United Kingdom, no matter the outcome of the UK’s EU referendum.

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Didier Kussu207 Regent StreetW1B 3HH London - United Kingdom

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